IRVING, TX-FelCor Lodging Trust Inc. has announced its intent to rebrand, renovate and reposition eight of its Holiday Inn properties. Beginning March 1, properties in Boston, Charleston, Houston, New Orleans, Philadelphia, Pittsburgh, San Diego and Santa Monica will operate under the Wyndham Hotels and Resorts brand.
Wyndham Hotel Group, part of Wyndham Worldwide Corp., will manage the hotels under 10-year management agreement with a $100 million performance guaranty and an annual guarnaty of up to $21.5 million.
In conjunction with the renovation and repositioning of the eight hotels, FelCor will spend approximately $34 million over the next three years, net of $10 million in key money from Wyndham, in comparison to the existing $27 million capital plans over the same period.
The properties slated for conversion are:
- Holiday Inn San Diego on the Bay, 1355 N. Harbor Dr.
- Holiday Inn Santa Monica Beach at the Pier, 120 Colorado Ave.
- Holiday Inn New Orleans French Quarter, 124 Royal St.
- Holiday Boston at Beacon Hill, 5 Blossom St.
- Holiday Inn Philadelphia-Historic District, 400 Arch St.
- Holiday Inn Pittsburgh at University Center, 100 Lytton Ave.
- Holiday Inn – Charleston Mills House, 115 Meeting St.
- Holiday Inn Hotel & Suites-Houston Medical Center, 6800 Main St.
“Today’s announcement further demonstrates our efforts to execute our long-term value creation strategy, which includes moving our portfolio into the upper-upscale segment. This agreement is focused on repositioning our portfolio in order to improve our portfolio quality, increase hotel operating income and create and protect long-term value for our stockholders,” says Richard A. Smith, president and CEO of FelCor in a press release. “We have a great partner in Wyndham Hotel Group, a company with a strong track record of managing upper-upscale hotels, and our long-standing rapport with Wyndham Hotel Group’s management team provides a strong foundation for our relationship.”
“These prime, center-city locations are significant and strategic additions to our Wyndham Hotels and Resorts portfolio,” adds Wyndham Hotel Group President and CEO Eric Danziger in the same release. “This is a great opportunity for Wyndham Hotel Group to significantly increase our presence without significant capital outlays.”
InterContinental Hotels Group and FelCor will maintain its relationship going forward, as Holiday Inn will continue to flag and manage five consolidated FelCor properties, located in San Francisco, Nashville, Toronto, Santa Barbara and Orlando. FelCor will pay $30.7 million to terminate its management agreements at the eight hotels.